Automotive Cyber Security Market to Surpass USD 22.2 billion by 2032

Introduction

The automotive cybersecurity market is projected to reach USD 22.2 billion by 2032, with a steady compound annual growth rate (CAGR) of 22% from 2023 to 2032. It was estimated to be worth USD 3.9 billion in 2023. This market segment focuses on safeguarding automotive communication systems, internet-connected vehicles, users, and data against unauthorized access and damage. The increase in cyber-attacks on vehicles is attributed partly to the extensive use of electronic components to reduce vehicle weight, thereby exposing the automotive industry to cybersecurity risks.

Among the various segments, wireless security holds the majority share in the automotive cybersecurity market, protecting wireless networks from unauthorized access. Passenger cars dominate the market due to their high connectivity with external cloud services, making them more susceptible to cyber-attacks. Infotainment applications, catering to communication, entertainment, and information needs, hold the largest market share, emphasizing the importance of instant access to communication and information in the automotive sector.

The growth of the automotive cybersecurity market is fueled by the use of electronic components in vehicles on a large scale, increasing demand for safety, comfort, and convenience features, and the rise in infotainment usage in vehicles. However, cybersecurity solution providers face challenges due to the implementation of multiple pricing models by software companies, affecting their revenue generation.

The adoption of adaptive security techniques in the automobile industry is expected to fuel market growth, as it analyzes behaviors and events to prevent and adapt to attacks before they occur. Digitization and connected vehicles have increased the likelihood of cyber-attacks on the automotive sector, necessitating robust cybersecurity measures.

In terms of regional analysis, Asia-Pacific held the largest market share in 2022, driven by factors such as lack of protection measures and an increase in cyber-attacks. North America accounted for the second-largest automotive cybersecurity market and is expected to grow at the highest CAGR during the forecast period, attributed to the adoption of automated passenger vehicles and advancements in smart transportation systems.

Key players in the automotive cybersecurity market include Intel Corporation, Argus Cyber Security, NXP Semiconductors N.V, Guardknox Cyber-Technologies Ltd., among others. These players are focusing on strategic policies and advanced software development to expand their businesses in foreign markets.

Key Takeaways

• By 2032, the Automotive Cyber Security market is projected to reach USD 22.2 billion, with an anticipated compound annual growth rate (CAGR) of 22% between 2023-2032. In 2023, the market was estimated to be worth USD 3.9 billion.
• Wireless security holds the majority share in the Automotive Cyber Security Market, protecting wireless networks from unauthorized access.
• Passenger cars dominate the market due to their high connectivity with external cloud services, making them more exposed to cyber-attacks. Additionally, the increasing demand for safety, comfort, and convenience features in vehicles is also contributing to market growth.
• Infotainment applications hold the largest market share, highlighting the essential role of instant access to communication and information in the automotive sector.
• Asia-Pacific held the largest market share in 2022, driven by factors such as lack of protection measures and an increase in cyber-attacks, particularly in the context of digitization and connected vehicles.
• The automotive cybersecurity industry includes prominent players such as Intel Corporation, Argus Cyber Security, NXP Semiconductors N.V, Guardknox Cyber-Technologies Ltd., and others, who are focusing on strategic policies and advanced software development to expand their businesses.

Automotive Cyber Security Statistics

• Cyber Vulnerabilities Detected: In 2023, there were 266 high-severity cyber vulnerabilities identified in automotive industry companies globally. Additionally, 34 critical and 66 medium-severity vulnerabilities were recorded.
• Incident Origins: A substantial 63% of cyber incidents were executed by black hat actors, highlighting a predominance of malicious intent behind the attacks.
• API-Related Incidents: There has been a dramatic 380% increase in incidents related to Application Programming Interfaces (APIs) compared to the year 2021. This suggests a growing vulnerability in the interaction between automotive software systems.
• Deep and Dark Web Activity: Findings from the deep and dark web pertaining to the automotive industry have risen by 35% since 2021, indicating an increased focus from cybercriminals on this sector.
• Nature of Attacks: The majority, 84.5%, of automotive cyber attacks were conducted remotely, emphasizing the global threat landscape. Meanwhile, 40.1% of these incidents targeted back-end servers. Contrarily, physical attacks were minimal, accounting for only 3% of the total.
• Historical Trend: There has been a substantial rise in the number of publicly reported vulnerabilities, from 24 in 2019 to 378 in 2023. This represents a significant increase in detected threats over a four-year period.
• Economic Impact: Projections indicate a potential surge in financial losses due to cyber incidents in the automotive industry, with estimated losses possibly reaching USD 10.5 trillion annually by 2025. This forecasted increase of 15% annually underscores the critical need for enhanced cybersecurity measures.

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Emerging Trends

• Connected Vehicle Security: With the rise of connected vehicles, ensuring the security of data transmission and communication within vehicles has become paramount. Solutions focusing on securing vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communications are gaining traction.
• Integration of AI and Machine Learning: Artificial intelligence (AI) and machine learning (ML) are being increasingly integrated into automotive cyber security solutions. These technologies help in detecting and responding to cyber threats in real-time, enhancing the overall security posture of vehicles.
• Shift Towards Over-the-Air (OTA) Updates: Automotive manufacturers are adopting over-the-air (OTA) update mechanisms to deliver security patches and software updates to vehicles remotely. This enables swift responses to emerging threats and vulnerabilities without requiring physical intervention.
• Rise in Regulatory Compliance Requirements: Governments and regulatory bodies are imposing stricter regulations pertaining to automotive cyber security. Compliance with standards such as ISO/SAE 21434 and UN R155 is becoming mandatory, driving the adoption of robust security measures across the automotive industry.
• Collaboration Between OEMs and Cyber Security Providers: Original Equipment Manufacturers (OEMs) are forging partnerships with cyber security providers to develop comprehensive security solutions tailored for automobiles. This collaboration aims to address evolving cyber threats effectively while ensuring seamless integration with vehicle systems.

Top Use Cases

• Securing Connected Car Ecosystems: Automotive cyber security solutions are deployed to safeguard the entire connected car ecosystem, including in-vehicle systems, telematics platforms, and mobile applications. This ensures the protection of sensitive data and prevents unauthorized access to vehicle functionalities.
• Preventing Remote Vehicle Hijacking: Cyber security measures are implemented to prevent remote vehicle hijacking, where malicious actors gain unauthorized control over vehicle functions such as steering, braking, and acceleration. Techniques such as intrusion detection systems and secure authentication mechanisms mitigate the risk of such attacks.
• Ensuring Data Privacy and Integrity: With the proliferation of in-vehicle data collection and processing, ensuring data privacy and integrity has become critical. Automotive cyber security solutions encrypt sensitive data, authenticate data sources, and implement access controls to safeguard against data breaches and tampering.
• Protecting Connected Infotainment Systems: Infotainment systems in modern vehicles are vulnerable to cyber attacks due to their connectivity features. Automotive cyber security solutions protect these systems from malware, ransomware, and unauthorized access, preserving the integrity of entertainment and communication functionalities.
• Securing Autonomous Vehicle Technologies: As autonomous vehicle technologies continue to evolve, ensuring their security is paramount. Automotive cyber security solutions provide real-time threat detection and mitigation for autonomous driving systems, preventing potential safety hazards and ensuring passenger safety.

Major Challenges

• Complexity and Interconnectivity: The growing complexity and connectivity of modern vehicles enhance their vulnerability to cyber attacks. More electronic control units (ECUs) and connected features expand the attack surface, requiring advanced security measures.
• Technological Advancement: The rapid pace of technological advancement in automotive technologies often exceeds the development of corresponding security measures, creating vulnerabilities that can be exploited by cyber attackers.
• Supply Chain Vulnerabilities: The extensive and interconnected automotive supply chain introduces significant cyber risks. Ensuring that all parts of the supply chain meet stringent cybersecurity standards remains a persistent challenge.
• Regulatory Compliance: Keeping up with evolving global cybersecurity regulations and standards adds complexity and cost. Complying with detailed frameworks requires continuous management throughout the vehicle’s lifecycle, challenging given the fast pace of technological change.
• Shortage of Skills: The automotive industry faces a notable shortage of cybersecurity skills. This gap can hinder the effective implementation and maintenance of cybersecurity measures across automotive products.

Market Opportunities

• Rising Demand for Connected Vehicles: The increasing integration of connectivity and autonomous driving technologies drives demand for robust automotive cybersecurity solutions. As these technologies become more common, the need for comprehensive security measures intensifies.
• Regulatory Mandates: New regulations and standards mandating cybersecurity measures across the automotive industry create opportunities for growth in compliance-related services and solutions. Companies that effectively navigate these regulatory landscapes are well-positioned for growth.
• Technological Innovations: Advancements in technologies such as machine learning, artificial intelligence, and blockchain offer new opportunities to enhance automotive cybersecurity. These technologies can help automate security processes and improve threat detection and response capabilities.
• Data Monetization: The data collected by connected vehicles can be utilized for various services and applications, offering significant opportunities for monetization under secure conditions.
• Collaborative Efforts: Increased collaboration between automotive manufacturers, cybersecurity firms, and regulatory bodies fosters a more secure automotive ecosystem. This collaborative approach helps in sharing knowledge, tools, and best practices to improve overall industry security standards.

Recent Developments

• In February 2023, ETAS, a subsidiary of Robert Bosch GmbH, introduced ESCRYPT C_ycurRISK. This software tool is designed for threat analysis and risk assessment in the automotive industry. It aids automotive original equipment manufacturers (OEMs) and suppliers in detecting security vulnerabilities early in vehicle development, thereby systematically reducing cyber risks.
• In January 2023, the International Centre for Automotive Technology (ICAT) announced plans to invest in a new facility focused on developing cybersecurity skills. This initiative aligns with ICAT’s role in certifying vehicles for security and compliance with local regulations, emphasizing the growing importance of cybersecurity expertise in the automotive sector.
• Additionally, in January 2023, HL Mando Corporation entered into a collaboration with Argus Cyber Security. This partnership led to the integration of the Argus CAN Intrusion Detection Systems (IDS) into HL Mando’s electrification system products, including brakes and steering systems, enhancing their security against cyber threats.
• In October 2022, NTT Communications Corporation and DENSO Corporation announced a joint venture to develop Vehicle Security Operation Center technology (VSOC1). This technology is aimed at combating increasingly sophisticated cyber-attacks targeting vehicles, illustrating a proactive approach to enhancing vehicular cybersecurity.

Conclusion

The Automotive Cyber Security market is poised for significant growth, driven by the increasing integration of connected technologies in vehicles and the rising awareness of cybersecurity threats. As automotive systems become more interconnected through IoT and other technologies, the potential for vulnerabilities that could compromise vehicle safety and data privacy escalates. This has prompted manufacturers and stakeholders to invest robustly in cybersecurity solutions to safeguard vehicles from potential cyber attacks.

The market’s expansion can be attributed to stringent regulatory standards, technological advancements, and the escalating demand for connected vehicle features. These elements collectively ensure that the industry not only focuses on innovation but also prioritizes security, thereby fostering a resilient automotive ecosystem.